2. Republic Food Enterprise Center
A REGIONAL FOOD HUB LOCATED IN THE
HEART OF SOUTHWESTERN PENNSYLVANIA
REUSING A FORMER GROCERY
DISTRIBUTION CENTER AND SUPPORTING
LOCAL AGRICULTURE AND BUSINESSES
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3. What is a Food Hub?
According to the USDA’s food hub study group
(2011) a food hub is:
“A centrally located facility with a business
management structure facilitating the
aggregation, storage, processing, distribution
and/or marketing of locally/regionally produced
food products”
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4. Republic Food Enterprise Goals
Bridge the divide between the region’s growers and the
region’s consumers
Expand market for local food to include stabilized and value-
added product that can be sold off-peak
Provide additional value and stability, and an outlet for
extra/damaged produce to farmers
Fill demand in marketplace for locally-grown ingredients
Leverage relationships with large end market organizations
(Lutheran Services, Food Bank, Eat n’ Park, Giant Eagle) to
inform farmers of products in demand
Provide jobs, economic development, and long-term wealth
creation in an economically depressed area by building
employee and farmer cooperative ownership
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5. Reconstructing the infrastructure
Absence of infrastructure
to sustain regional food
systems prevents
Growers
establishing a complete
regional food business eco-
system
Consumers Aggregators Infrastructure needs to be
based in markets and
sustainable with normal
market activity
Improvements in
Value infrastructure can lead to
Added Processors better financial
Products
performance for farmers
creating a healthy cycle
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6. Year Round Hub Strategy: Value Added
By aggregating, stabilizing
and processing to Value
Added Products (VAP)
hubs take local year round
VAPs bring more value to
growers, can use produce
that otherwise gets thrown
away
VAPs can provide local
food businesses with local
products when fresh is not
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7. Switching from Supply Chain to
Value Chain
IN ORDER TO MAKE THE CHANGE WE HAVE
TO THINK DIFFERENTLY ABOUT OUR PLACE
IN THE LOCAL FOOD SYSTEM – AND THE
PLACE OF ALL AROUND US
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8. Supply Chain vs. Value Chain
Supply Chain Value Chain
Supply chains favor large Value chains integrate
scale suppliers small producers, get
scale thru collaborating
Supply chain does not Value chains are demand
encourage smaller units of driven (pull), involve
production – all push customers early and
Supply chains trickle
often
down profits and squeeze Value chains respect the
entire system and direct
the producers into smaller profits to the source of
and smaller margins supply
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17. Republic Food Enterprise Center – A CBSE
RFEC is a Community-
Based Social Enterprise
Solves a problem in an
existing regional supply End
chain which is market Markets
based
Provides value to both
suppliers and customers RFEC
Will be owned by the
employees and the
Growers
community
Must be Sustainable and
profitable
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18. Republic’s Community Benefits
• 20 to 35 jobs on site by third year
• 50 t0 100 jobs in related businesses
Job &
Enterprise • Dozens of small food enterprises growing to scale
• $4-5 million in farm purchases over four years processing
Direct millions of pounds of local produce for local markets
Spending
• Employee Owners
• Producer Owners
Shared
Ownership • Community Stakeholders
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19. Sourcing
Today and in the Future
DEMAND CURRENTLY OUTSTRIPS SUPPLY.
UNLESS WE CHANGE THE UNDERLYING
ECONOMICS FOR THE GROWERS WE CANNOT
CHANGE THAT CONDITION AND LOCAL FOOD
WILL NOT REACH ITS POTENTIAL TO
CHANGE OUR LOCAL FOOD SYSTEM
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21. Top Ten Vegetables
Western PA Top 10 Vegetables Eastern Ohio Top 10 Vegetables
Total Harvested Total Harvested
Rank Vegetable
Acres Rank Vegetable Acres
#1 Sweet corn 4357
#1 Sweet Corn 5154
#2 Potatoes 4393 #2 Pumpkins 1903
#3 Pumpkins 1298 #3 Potatoes 946
#4 Tomatoes 823
#4 Cabbage, Head 600
Tomatoes in the
#5 Peppers, Bell 324
#5 open 571 #6 Lettuce 281
#6 Peppers, Bell 301 #7 Beans, Snap 238
#7 Beans, Snap 235 #8 Peppers, Chile 144
#8 Squash 147
#9 Peppers, Chile 86
#9 Squash 136
#10 Cucumbers 73 #10 Cabbage, Head 95
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22. Top Ten Fruits
Western PA Top 10 Fruits Eastern Ohio Top 10 Fruits
Total Harvested Total Harvested
Rank Fruits Acres Rank Fruit Acres
#1 Grapes 12419 #1 Apples 1849
#2 Apples 1725 #2 Grapes 1138
#3 Peaches 288 #3 Peaches 274
#4 Melons, Canteloup 180
#4 Blueberries, Tame 202
#5 Strawberries 145
#5 Strawberries 116
#6 Blueberries, Tame 99
#6 Pears 94
#7 Raspberries 69 #7 Melons, Watermelon 72
#8 Plums and Prunes 40 Blackberries (include
#9 Cherries 39 #8 Dewberries) 41
Melons, #9 Raspberries 31
#10 Watermelon 28 #10 Pears 26
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23. Western Pennsylvania
Commodity Crops vs Top Ten Fruits and Veggies
Acres Harvested 2007
15020
12061
Commodity Crops
Fruits
Vegetables
1060396
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24. RFEC Sourcing Strategy
Growers of fruits and vegetables report inadequate
income to support their farms
RFEC has two goals in the sourcing strategy
Ensure that growers are able to get the most revenues for their
harvests by decreasing the waste which results from either
inability to take seconds to market or to sell firsts in a timely
manner
Improve the economic return for growers so that there is an
increase in the amount of acreage and yield of fruits and
vegetables in the region’s farming community
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25. Seconds = $8.6 Million Opportunity
Based on the CMU
study, the annual value-
added products that
could be produced off of
seconds generated by
southwest Pennsylvania
farms could easily exceed
$8.6 Million
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26. Demand:
Growing and Unmet
THE DEMAND FOR LOCAL FOOD AND FOOD
PRODUCTS HAS NEVER BEEN HIGHER AND IT
CONTINUES TO GROW ACROSS ALL LEVELS
OF THE CONSUMER POPULATION
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27. Increasing the Value to Producers
Fresh Produce – In season Value-added – Year round
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28. Consumers are more likely to prefer
VAPs with local and eco-friendly content
Influences consumers most now Will grow the most in the next few
years
Manufacturer Distributor Manufacturer Distributor
All Natural 80% 88% 51% 50%
Organic 46% 50% 32% 38%
Local 46% 50% 52% 50%
Eco Friendly 30% 13% 50% 44%
Sustainable 15% 13% 47% 56%
Fair Trade 4% 19% 13% 13%
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Source:Specialty Foods Report
29. Servicing Large Regional Buyers
Lutheran Services Society (Meals on Wheels)
Food Banks
Eat n’ Park
Giant Eagle
School Districts
Restaurants
Corporate Cafeterias
It’s all about scale…
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30. What the Republic Hub Will Do
RFEC IS A PLATFORM IN OUR LOCAL FOOD
SYSTEM THAT WILL DO THREE THINGS VERY
WELL:
•A G G R E G A T E
•S T A B I L I Z E
•P R O D U C E V A L U E - A D D E D P R O D U C T S
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31. Aggregator
Pre-planting
negotiations with area
growers
Simplify collection
process around farmer’s
markets
Emphasize collection of
seconds as well as firsts
Non-farm aggregation as
well such as auctions and
produce wholesalers
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32. Stabilization
Process fresh produce
soon after collection
Convert into common
ingredients
Build sufficient
inventories to carry the
Hub’s VAP through the
non-growing season
Use both shelf stable and
frozen technologies
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33. Value Added Products
Hub develops lines of VAPs
in partnership with End
Markets (EMOs)
VAPs are derived primarily
from the ingredients
derived from local growers
and producers
In general, the Hub will
seek opportunities for
VAPs that fit the “G-B-B”
approach to retail (Good-
Better-Best)
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34. Opportunity for Collaboration
Republic Food Enterprise Center can:
Serve as the next step after shared-use kitchens for food
entrepreneurs
Provide access/entry into larger commercial markets
Serve help source local produce
Offer training and experience on larger food processing
equipment
Provide guidance and technical assistance to shared-used
kitchen start-ups
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35. Thank You!
This Plan is the exclusive
property of Hollymead
Capital Partners LLC
Any reproduction without
the expressed written
permission of HmCapital
is prohibited
HmCapital Partners
6000 West Grove Circle
Gibsonia, PA 15044
www.hollymeadcapital.com
HmC LLC
Editor's Notes
Factors that influence consumers most now and factors that will influence consumers most in the future, according to manufacturers and distributors. Both agree that local is important or will become more important, and eco friendly and sustainable will grow in terms of how influential they are. Eco friendly and sustainable factors closely linked to being local as well.